Texas Is Leading the Way for the Hemp-Derived Cannabinoid Market

Texas Is Leading the Way for the Hemp-Derived Cannabinoid Market

As more and more states levy harsh restrictions and bans on the much-maligned intoxicating hemp derivative (IHD) market, Texas is taking a far different approach.



In a world seemingly more divided on every issue imaginable, the small but vibrant world of hemp and its downstream derivative products is an outlier worth examining for its players’ resiliency and adaptability to adversity and change. A perfect case in point is the enigmatic and larger-than-life state of Texas.


With hemp under fire for its intoxicating derivatives, like delta-8 THC, by a growing number of states, the conservative and extremely anti-recreational cannabis stronghold has emerged as one of hemp’s most ardent and passionate champions.


The March-April issue of MJBizMagazine examines the unique and innovative approach by Texas state health officials, legislators, and law enforcement agencies regarding products containing IHDs. 


While other states, like Mississippi, Colorado, Nevada, New York, and Massachusetts, have enacted strict new laws and regulations against IHD products, Texas state regulators and the judiciary have taken a predominantly hands-off approach, allowing the hemp-derived cannabinoid sector to thrive.


“That hands-off approach has really allowed the market to figure out what (consumers) want and producers and manufacturers to figure out how to best get those products to them. If anything, a more hands-off approach has shown how this state is ready for this,” said Colt Power, CEO of Power Biopharms, a low-THC hemp cultivation business in Euless, Texas.


"That hands-off approach has really allowed the market to figure out what (consumers) want and producers and manufacturers to figure out how to best get those products to them. If anything, a more hands-off approach has shown how this state is ready for this."

- Colt Power, CEO of Power Biopharms


Other hemp business entrepreneurs, like Shayda Torabi, CEO and co-founder of Restart in Austin, also highlight the Texas example as proof that states can foster and encourage a legal market for IHD product offerings that circumvents the conventional path of legalizing medical marijuana and then eventually recreational adult-use cannabis. 


“Texas has a very large market. And it’s not the illicit market. It’s the hemp-derived market. People recognize that Texas is not waiting to enter the game. We’re already in the game,” Torabi said.


"Texas has a very large market. And it’s not the illicit market. It’s the hemp-derived market. People recognize that Texas is not waiting to enter the game. We’re already in the game."

- Shayda Torabi, CEO and Co-Founder of Restart


Power credits the Texas judiciary for helping legitimize and solidify the hemp-derived cannabinoid industry following the passage of the 2018 Farm Bill, which legalized hemp and all of its downstream products and uses. 


When the Texas Department of State Health Services attempted to challenge a 2021 injunction that temporarily halted its ban on delta-8 THC products last year, the Texas 3rd Court of Appeals definitively shot down the Department’s strategy and upheld the legal right for hemp businesses like Power’s to continue cultivating, manufacturing, and selling IHD products.


However, hemp operators in Texas must still satisfy several requirements to continue operating legally. Those guidelines include:


  • Hemp cultivators must have a lot permit or license, and are only allowed to grow low-THC strains from a state-approved list.
  • Plants must be tested within 30 days of harvest. A test taken a few days too late can result in total crop disposal, so the timing of testing is precise and rigid.
  • Plants must test below the federal threshold of 0.3% total THC (Delta-9 THC + THC-A multiplied by a conversion factor).
  • Crops that pass the testing process must be harvested within 30 days.

Overall, hemp business operators are generally pleased with how the current market functions. However, many say they would be open to additional regulations and guidelines to help the industry mature and set an example for federal agencies to emulate.


“People are paying attention to Texas. They’re paying attention to how we’re handling this. And we want nothing more than to regulate – not eliminate. We want to be professional about it and recognize that we’re making products for consumers,” Torabi said.


"People are paying attention to Texas. They’re paying attention to how we’re handling this. And we want nothing more than to regulate – not eliminate. We want to be professional about it and recognize that we’re making products for consumers."

- Shayda Torabi, CEO and Co-Founder of Restart


Likewise, because Texans have legal access to IHD product offerings, there is no imminent “rush” to legalize adult-use cannabis, thus allowing lawmakers and industry advocates to thoughtfully focus on the regulatory aspect of the hemp-derived cannabinoid market without the pressure of any deadlines on the legal marijuana side.


Of course, the landscape could suddenly change if the political winds shift and Texas lawmakers decide to pivot to legalizing adult-use cannabis, as close to half the states in America have already done.


However, until that time, the Texas model could provide a welcome template for states that do not have any form of legalized marijuana but are struggling to address the issue of how to handle their legal and unwieldy IHD product markets.